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Battle between telcos, banks over N100bn USSD debt jeopardises e-payment



Battle between telcos, banks over N100bn USSD debt jeopardises e-payment

Many Nigerians now have access to financial services thanks to USSD code, which has increased the uptake of e-payment methods and financial inclusion in general.

Nigeria’s digital revolution was sparked by the expansion of telecom services, and as more individuals acquired phones, companies started using them as service outlets.

Many companies created mobile apps to make their services available on mobile devices, but they soon realised that they were missing out on a large number of clients.


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The lack of smartphone ownership in the nation restricted the use of these mobile apps, forcing companies to turn to USSD-based service delivery.

Many Nigerians embraced USSD services due to their ease of use.

In addition to easing some of the strain associated with traditional banking, USSD gave banks a way to market their services to many financially underprivileged Nigerians.


At the 20th anniversary of Nigeria’s telecoms revolution, Mr. Ebenezer Onyeagwu, Group Managing Director of Zenith Bank Plc, said that USSD has altered the landscape of financial inclusion.

“The introduction of USSD changed everything. Without telecoms infrastructure, there is no USSD code,” he remarked.

With USSD, people in places without banks might afford to open accounts and conduct transactions on their phones, expanding the pool of people who have access to financial services.

By 2019, telecom providers revealed that financial transactions made by local bank customers accounted for 90% of USSD traffic.

USSD transactions reached 762.19 million by 2020, according to the Nigeria Inter-Bank Settlement System Plc.


The basic and feature phone technologies had a revolutionary impact on how people interacted in emerging nations, according to the global association for telcos (GSMA).

GSMA said, “Notably, nine in 10 mobile money transactions in Sub-Saharan Africa still flow through USSD. Specifically, USSD has proved to be a useful tool in dealing with the fallout of the COVID-19 pandemic.”

The Finances Behind USSD

Despite its significance, this vital infrastructure is in danger of malfunctioning or ceasing to function since banks are purportedly paying telecom operators N100bn for providing USSD technology.

Since 2019, there has been a dispute between banks and telcos over who should be responsible for paying for USSD services and how that payment should be made. As a result, banks have received several disconnection threats from telcos.

Since then, the government has intervened, but despite years of negotiations and the imposition of an N6.98 tax, it has been unable to mediate a solution. Telcos stated by the end of 2022 that they had had enough and were awaiting regulatory authority to stop banks from utilising USSD.


The Chairman of the Association of Licensed Telecoms Operators of Nigeria, Gbenga Adebayo, stressed, “Time will soon come when we will be constrained to withdraw the service and many bank customers that depend on the USSD service will suffer for it and it will affect the economy.”

At the time, the total alleged debt was N80bn. As of April 2023, the Head of Operations of ALTON, Gbolahan Awonuga, revealed that the debt had risen to N100bn.

Although telcos have yet to withdraw USSD services, they have begun to wash their hands off the infrastructure that supports the service.

A source in the telecoms industry revealed to ENIGERIA that telcos had stopped expanding the USSD infrastructure which was causing some glitches in the system.

“The adverse effect of this is that telcos are not willing to invest in the infrastructure anymore because the banks are not paying. If they are paying, we would be willing to invest in it. And that is why there are problems with USSD banking now because telcos that should make it really robust are not doing so.”





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